GIRARD Mayor: Crisis to last two years

The mayor says he's received calls from volunteers who would like to serve on the fiscal recovery commission. By TIM YOVICH VINDICATOR TRUMBULL STAFF GIRARD -- Mayor James Melfi says the city will remain under the shadow of a fiscal emergency for about two years. "I don't believe it will be drawn out," Melfi said Thursday. State Auditor Jim Petro declared the emergency status Wednesday because of the city's financial problems. For a fiscal emergency to be declared, one of six conditions must be met. Girard meets two: defaulting on debt obligations and deficit fund balances. Melfi said that Petro told him earlier this week that the emergency status will remain for about two years. It's not expected to run longer, the mayor explained, because only two areas must be corrected. Kim Norris, Petro's spokeswoman, said many communities remain in fiscal emergency three to five years and some are taken off in a year. Cleveland was in it seven years, Norris said. Finance commission: During the emergency, a seven-member fiscal planning and supervision commission will oversee city finances. The commission composed of appointees from the local and state levels has broad oversight to reduce spending and stabilize finances. That includes the approval of a financial recovery plan prepared by the city within 120 days of the commission's first meeting. Melfi said he has gotten calls from volunteers who want to serve on the commission. Performance audit: Petro explained that to assist the city and commission, his office will issue a performance audit to help identify options for budget reductions and operational improvements. This will be followed by the 2000 regular state audit, Norris explained. The commission will also develop a five-year plan projecting financial stability. Melfi said another reason the recovery won't be drawn out is because he has been working on a list of what can be done to get the city out of red ink. Debt reduction: The list includes spreading the debt over a longer period. The city borrowed $4 million from a commercial bank to pay for a new justice center that Melfi says cost $5.2 million. An additional $2.2 million has been borrowed from the bank to place utility lines underground along U.S. Route 422 when it is widened. Melfi said he wants to sell bonds to help reduce the debt, noting city officials have met with a Cleveland bond counsel. He said the city could consolidate the loans, including the actual cost of the justice center and pay it off over 25 years instead of 19 at a lower interest rate. "That will be a help, but it will not solve our problem," Melfi asserted. The plan also calls for the sale of Girard and Liberty lakes, or a portion of them, if the property remains in Girard and is not annexed to Niles. yovich@vindy.com